Update: Estate Tax

There is no new word on the status of a new estate tax bill from Congress.  The Hill reported early in June that Sen Charles Grassley (R-Iowa) is pushing Senate Majority Harry Reaid (D - Nevada) for some form of backing to several proposals.  According to the Hill, Reid is not tipping his hand on what he plans on doing, as the estate tax law is set to revert pre 2001 levels of 55% levy on estates valued at over $1 million for 2011.

Grassley stated he would like a bill to come out of the Senate finance committee, but he has no guarantees from Reid that the full Senate would consider any new bill on the estate tax. Given the current budget deficit, I would believe there is consideration of either leadership inaction or a bill which taxes at a higher rate than many expect or are currently proposing (such as the bipartisan bill of Jon Kyl and Blanche Lincoln).

Only time will tell what happens. I will try to monitor the situation and post to the AW Blog as I get news of any movement.

In the mean time The Hill reports

Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) have hatched a bipartisan plan that would create a permanent 35 percent tax on estates worth more than $5 million. But without Reid backing the proposal, Grassley said the Senate Finance Committee is unlikely to bring the bill forward.

"The Finance Committee would like to consider the legislation, but we aren't assured by the majority leader that the bill passed out of committee would be taken up on the floor," he said.

Grassley is the ranking member on the Finance Committee and has conferred with Kyl and Senate Finance Chairman Max Baucus (D-Mont.) on the estate tax. Both men say Reid is playing his cards close to the vest when it comes to the levy.

"Reid will not really give us a clear direction," Grassley said, adding, "I think that there's going to be a tremendous upheaval at the grassroots of America – and more rural America than big city America – if it looks like we're going to revert to the million-dollar level."

Lawmakers were supposed to be close to a deal on the tax a few weeks ago, but that agreement apparently fell apart. During those negotiations, Kyl said there was some disagreement on how to pay for the bill. However, today, Grassley said offsets were no longer an issue, but did not say what offsets were being used to pay for the bill.

"We can find the offsets, that's no problem," he said. "It's not easy and one of the offsets was in another bill, but I don't think offsets is the problem."

Grassley could not say when the estate tax would be addressed.

To read the full Hill article, click HERE.